Glucocorticoids (GCs) are potent immunosuppressive and anti-inflammatory agents that are widely used in the treatment of autoimmune and inflammatory diseases, including rheumatoid arthritis (RA) and systemic lupus erythematosus (SLE). A well established mechanism of GC action is inhibition of AP-1 and NF-KappaB transcription factors that are activated by pathogenic cytokines such as IL-1 and TNF. We have explored the effects of GCs on the Jak-STAT pathway, the major signal transduction pathway utilized by a large number of cytokines important in rheumatic disease pathogenesis, including interferons (IFNs), interleukin-2 (IL-2), IL-6, IL-15, and GM-CSF. We found that GCs had minimal effects on basal Jak-STAT signaling. Instead, GCs strongly suppressed the sensitization and enhancement of Jak-STAT signaling that occurs during cell activation. Sensitization and enhancement of macrophage responses to cytokines and microbial products after previous exposure to IFNs was described in the 1970s and termed priming. More recently there has been increasing interest in a role for enhanced cellular responses to cytokines, microbial products, and environmental antigens in the pathogenesis of rheumatic diseases. Since priming is suppressed by GCs and relevant for rheumatic disease pathogenesis, we studied the molecular mechanisms of priming. Our long term goals are to increase our understanding of the molecular basis of priming, and subsequently to study how priming mechanisms are regulated by GCs. We have found that priming enhanced cytokine activation of Stat1, a pro-inflammatory transcription factor, by increasing Stat1 expression and coupling the Syk tyrosine kinase to the Jak-STAT signal transduction pathway. Priming also enhanced macrophage cytokine production by abrogating a feedback inhibition loop mediated by IL-10 and Stat3, an anti-inflammatory transcription factor in myeloid cells that mediates the suppressive effects of IL-10. Stat1 and StatS typically oppose each others' activity, and GCs suppressed Stat1 activation and promoted Stat3 activity. We hypothesize that altered Stat1 and Stat3 activation in primed relative to unprimed macrophages underlies the enhanced responses of primed macrophages to inflammatory factors and cytokines. In this application, we will delineate molecular mechanisms that regulate Stat1 and StatS activation and function in primed macrophages, and investigate the functional consequences of altered STAT activation in the context of rheumatic disease pathogenesis. We anticipate that these studies will provide insight into mechanisms that regulate cellular responsiveness to activating factors that are important in the pathogenesis of rheumatic diseases.